ESOP Blog

We have completed 350+ transactions with over $1.6 billion total assets under our administration.

United States District Court – Eastern District of North Carolina Renders Pro-ESOP Trustee Decision

April 29, 2020

In Lee v. Argent Trust Company, the district court dismissed the Plaintiff’s claim that Argent, as trustee of the Choate Construction Company ESOP, committed a fiduciary breach when it paid $198 million for the purchase of 100% of the company’s stock. The Plaintiff had alleged that she suffered damages because the ESOP’s stock was valued…

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Major Tax Benefits of ESOPs

April 22, 2020

ESOPs have several significant tax benefits, the most important of which are: 1. Contributions of stock are tax deductible: That means companies can get a current cash flow advantage by issuing new shares or treasury shares to the ESOP, although this means existing owners will be diluted. 2. Cash contributions are deductible: A company can…

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ESOPs Versus 401(k) Plans for Retirement Security*

April 15, 2020

ESOPs 401(k) Plans Contribution rate from company to the plan 6% to 8% of pay per year for all eligible employees. 4% of pay of those eligible employees making deferrals per year (about two-thirds to three-quarters of eligible employees defer into the plan). Rate of return Department of Labor data indicate ESOPs had a 9.1%…

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